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Crude Oil Supply Risks vs. Demand Dynamics

On May 12, crude oil markets remained volatile as geopolitical tensions in the Middle East continued to pose supply risks, while demand concerns from China's economic slowdown weighed on prices . Brent crude traded near $82–85 per barrel, with the market struggling to find clear direction . The US-Iran ceasefire agreement, signed in April, had initially removed some geopolitical risk premium, but tensions remained elevated with periodic skirmishes reported in the Strait of Hormuz area . On the demand side, China's April crude oil imports fell 3.2% year-on-year, reflecting weaker industrial activity and slower refinery throughput . India's demand remained robust, with May imports projected to rise 5% month-on-month . Market participants are closely watching OPEC+ supply decisions for the second half of 2026, with some members pushing for production increases to capture market share, while others advocate for maintaining cuts to support prices . The short-term outlook points to continued range-bound trading, with geopolitical developments and Chinese economic data serving as key price catalysts .